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Management Accounting- Assessment

   

Added on  2021-02-20

16 Pages4724 Words223 Views
MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION................................................................................................................................3MAIN BODY.......................................................................................................................................3LO 1......................................................................................................................................................3P1. Assessment of various tools of management accounting systems.............................................3P2. Defining various methods of managerial accounting reporting................................................4M 1. Evaluating the importance of management accounting techniques and systems...................5D1. Critical evaluation of management accounting system and reporting in integration with organization process.........................................................................................................................6LO 2......................................................................................................................................................6P 3. Effective management accounting techniques..........................................................................6LO 3......................................................................................................................................................9P4. Benefit and drawback of various types of planning tools in budgetary control........................9M 3. Assessment of various planning tools for predicting and preparing budget. .......................11LO 4....................................................................................................................................................12P 5. Comparison of the organization to respond to financial problems.........................................12M 4. Analysing how evaluation of financial problems can lead to sustainable growth of organization....................................................................................................................................13D 3. Planning tools for solving financial problems......................................................................13CONCLUSION..................................................................................................................................14REFERENCES...................................................................................................................................15

INTRODUCTIONManagement accounting is a concept which relates to the preparation as well as presentationof all the accounting, statistical as well as financial information in the internal managerial report. Byusing this report, it assists the manager of company in making crucial business as well asinvestment related decisions in line with the business goals. By formulating sound and effectivebusiness strategies, plans and policies every business organisation can successfully achieve its setdesired business goals and objectives in the economical manner. The report is based on MorphyRichards, which is manufacturing company founded in 1936 engaged in the business of electricaland home appliances. The company is having its headquarter in South Yorkshire, England. Thereport will give deep insight related to different managerial accounting techniques & systems whichcan assist the management in their decision-making process. Also, it will streamline variousbudgetary planning tools by use of which Morphy can make high production and profit margin andsolve its financial issues as well.MAIN BODYLO 1P1. Assessment of various tools of management accounting systems.Management accountingManagement accounting is an effective tool which helps manager of the organization ineffectively evaluating the financial reports of the Morphy Richards which leads to higher decisionmaking (Management Accounting – Meaning, Advantages & Functions, 2018). It helps in analysingthe cost of the business in an efficient manner. Management reports are prepared on a timelymanner which helps internal management of the organization in taking strategic decision withutmost accuracy and efficiency. Management accounting systemsManagement accounting system is an effective tool which focuses on providing statistical andmanagerial information to the manager of the organization for strategic decision making (Kaplanand Atkinson, 2015). On the contrary financial accounting gives information to the externalstakeholders of the organization. It helps in planning, organizing, controlling and monitoring theactivities for higher operational standards and efficiency. This helps in forecasting the future andcontrolling the cost of the enterprise which leads to high growth and profitability for the MorphyRichards.

Price optimizing system: It is an effective management accounting system which helps inanalysing the behaviour of the demand in the market with the changed in the price of a particularproducts and services. This system helps management in evaluating the appropriate price which willgenerate higher profits in return (Otley, 2016). This helps in analysing the buying behaviour of thecustomers with the change in the prices. This helps Morphy Richardsin taking effective decisionwhich leads to higher profits. Cost accounting system: It is also referred to as product costing method. This managementaccounting system helps organization in estimating the cost of the product or activity. Costaccounting system leads to inventory valuation, cost control and profitability analysis. This systemhelps Morphy Richards in effectively evaluating the accurate cost of carrying out the operations ofthe business. Inventory management system: It is an effective process of ordering, reordering and storingthe inventory of the organization on a timely manner without any delay. This helps in managing theraw material, finished products and various other components related to the manufacturing andproduction process (Renz, 2016). This mainly comprises of LIFO, FIFO and weighted averagemethod to accurately value and manage the stock of the Morphy Richards.Job costing system: It helps Morphy Richards in accumulating and distributing cost to eachindividual unit of the production. This method helps management in keeping track of the costassigned with each job (Maas, Schaltegger and Crutzen, 2016). Job costing system takes intoconsideration direct labour, direct labours and overhead cost in order to accumulate the accuratecost of the each unit of output. P2. Defining various methods of managerial accounting reporting.Managerial accounting report is a statement which is prepared by the company byconsidering every material and relevant information of accounting nature about the business. Ithelps company in process such as effective allocation of resources, evaluating & measuring theperformance level, decision making etc. These are of following types:Budget report- Is a report which helps Morphy Richards in making estimates about futurebusiness expenses and revenue amount for a definite period. It helps the management of Morphycan forecast about cost amount to be incurred for carrying on a specific business operations. It alsohelps in determining the level of variance, by making comparison of actual with estimated one(Church, Kuang and Liu, 2019). Thus, plans and strategies are framed by Morphy as per thevariance determined for overcoming the issue of low probability and performance level. Accounts receivable report- It tells about amount or the bill that are to be received by thecompany on the credit sales made to the customers, vendors etc. This report determines the amount

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